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US set for finance ministers' talks

Ministers gather in US capital for discussions on global financial crisis.

24 Apr 2009 20:34 GMT

Geithner said other nations must act alongside the US to combat the financial crisis [REUTERS]

"The US is initiating a comprehensive reform of our own system of financial regulation as part of our determined effort to lead a race to the top in regulatory and supervisory standards," he wrote in the Financial Times.

"That effort will not be wholly successful, however, without parallel action in other national financial systems."

It is thought Geithner may discuss with other financial ministers the results of so-called stress tests being conducted on the US's top 19 banks to determine whether they have sufficient funds to weather the crisis.

And he may detail efforts to remove "toxic" assets from bank balance sheets to put them in a better position to boost lending to consumers.

'Far from over'

The meetings come as a joint World Bank/IMF report released on Friday said that up to 90 million more people would suffer extreme poverty this year because of the economic crisis, while the number of "chronically hungry" couldtop one billion.

Efforts to cut poverty and hunger levels by half between 1990 and 2015 had begun well but were now at risk as overseas markets dry up, and foreign investment and the flow of aid come under pressure.

On Thursday, the head of the IMF said that the global economic crisis was "far from over" and had some "long months" to go before it ended.

Dominique Strauss-Kahn, the IMF's managing director, also said that recovery "has to come ... and will come" from the US.

"Despite some red lights and green lights ... our belief is the crisis is far from over," he told a news conference in Washington ahead of the annual spring meeting of the organisation.

His comments follow the release of an IMF report on Wednesday which forecast the global economy would contract 1.3 per cent this year.